TBA reading for 10.10

I forgot to ask for a discussion topic last Thursday, but with the news dominated right now by one thing basically, it seems like we might end up talking about the ongoing disputes over the government shutdown and the debt ceiling in any case. So check out the information and some of the links on this page, and bring your questions to class.

The other class also wanted to discuss the phenomenon of the so-called "golden age of television," and here's a good article  that discusses it. I'll check with you on Tuesday to see if this topic might be of interest, but in the meantime you can take a look at the article and see how you feel.

Finally, here's a suggestion for an optional audio piece, along with my analysis of how it fits in with the Ackerman piece. We can talk about the latter this week, and I'll be interested to get your take on my argument below.

For those interested in the article on a feasible socialism that we read for last week, the above podcast provides a useful counterpoint. Recall that one of Ackerman's main arguments for a type of socialism that goes above and beyond the traditional welfare state is that without the former the latter is ultimately quite unstable: as long as wealth inequality exists alongside the public investments and wealth transfers that constitute the welfare state, these benefits will face constant attack from powerful interests, even if they are popular. Ackerman, interestingly, flips the classic argument for choosing socialism over the welfare state on its head: instead of seeing the welfare state as a second best solution that bribes the populace into submission and prevents them from demanding a more radical form of socialism, Ackerman argues that socialism is necessary simply for the mass benefits of the welfare state to continue and expand. It is not false to believe that there really could be some better, more moderate alternative to a fully-fledged socialism; it is simply that this alternative needs a fully-fledged socialism to realize its full potential. The welfare state, in Ackerman's final analysis, is simply unworkable under our current economic system.

The interview with Tyler Cowen may lend credence to Ackerman's argument. Cowen offers what he understands as a mere impartial prediction of the future trends of the economy. However, when I contemplate his argument in light of Ackerman's piece, I start to see it as confirming Ackerman's argument that the welfare state will basically fall apart if current trends continue the way they have.

However, Cowen's argument is in a way even more pessimistic than Ackerman's, and actually offers a reason why Ackerman's solution could be appealing not simply to those on the left. Cowen suggests an outcome worse than the simple continuance of the welfare state: one in which the benefits of the welfare state itself become increasingly concentrated among the older and wealthier individuals. Cowen claims that inequality will worsen in the future as a larger share of economic gains accrue to those who have the skills necessary to design, repair, and work with sophisticated technology. Disproportional benefits will accrue to those who own capital, who can develop their human capital through sophisticated education, or who have rare and valuable talents and skills. Along the way, he says, this wealth concentration will erode political support for government policies that benefit a broad sector of the population without eroding political support for government policies that benefit relatively well-off sectors.

Now for some reading this, this may seem an exciting and hopeful prospect: demolishing the welfare state in any form is still an improvement. But Cowen is talking not simply about transfer payments and other forms of benefits--which by the way overwhelmingly go to the middle class under our current system, not the poor, and which Cowen thus argues will continue--but about public investments. Cowen actually thinks that things like Medicare will fare relatively well in the future since relatively well-represented and politically powerful groups rely on it. Even if those benefits continue, he argues that public investment in education will almost certainly decline, as the older and wealthier suck up a larger portion not simply of income but of government resources.

One of the scariest parts of his argument for me is the prospect that traditional education will increasingly become a luxury reserved only for those who can pay for it. Of course, public spending on education would not go away completely. The problem with this would be that education is not simply a benefit to the individual but to the society at large. An educated population is more productive and an essential part of  a modern, competitive economy. Investment in education will continue in Cowen's predicted world, but for the vast majority of people this will essentially represent a form of glorified self-help. They will have to struggle through online or computer-mediated education. Some will thrive, but others will not. The results will be that those who have the basic personality traits that allow them to complete self-directed educational programs will do well, as will those who have the financial means to afford higher education. Because many of the traits that encourage self-discipline and curiosity are a product of previous educational attainment, and because that will increasingly be linked with economic status, success in either of these tracks will essentially correlate highly with socioeconomic status.

What this will mean is that at a time when education is becoming more crucial for success, we will start erecting barriers for more and more students to attain it. What Cowen does not say, but which becomes clearer when comparing his argument to Ackerman, is that this outcome would be the result of a political choice and not simply of an economic necessity. We will be wealthy enough in the future to afford to expand traditional education while preserving much of the welfare state, even those portions that benefit the middle class. While some very narrow sectors of the economy might benefit from spending less on education--Cowen again cites older individuals with their disproportional political power--on the whole it will make us less well off. Perhaps we can "afford" to be less well off, in the sense that the future will already be quite affluent. But more affluence, and access to that affluence through widely available social investments like education, represent a possible alternative to Cowen's vision, or some hybrid welfare state version of it in which an educated elite redistributes income to the lower orders through taxes and charitable contributions.

Cowen's analysis of the political dynamics of this future suggests to me that Ackerman just might be right. If we are to avoid a future of stagnation for the vast majority, one which can only be ameliorated through a relatively vulgar system of redistribution of income, it might be necessary to disrupt the current structure of ownership of capital. This would not simply serve to underscore and strengthen a broader based welfare state. It might actually serve to head off a worse version of the welfare state, one in which the relatively rich and privileged extract benefits while the poor and lower middle rungs of society flounder.